The contemporary economy is characterized by the process that is traditionally defined as globalization. As a result, any company operating in the market has to take into considerations this trend in order to remain highly competitive and keep progressing. In this respect, it is worthy to note that in such a context one of the strategic issues practically all companies, which plan to really progress, has to focus on the enlargement of the markets and, consequently, the entering foreign markets is getting to be of a paramount importance.
In terms of this marketing plan, the perspectives of the pharmaceutical company entering the market of Oman with the new product for this country Rennie will be analyzed along with the analysis of the current macro and micro economic environment within the country and the industry. It is necessary to underline that the successful entering the Omani market is impossible without the profound marketing research, especially in the situation when numerous foreign companies have already had certain experience in the local market and there are some strong and highly respectable companies that are well-known worldwide.
At the same time, this makes the entering of the Omani market particularly important since it opens new opportunities for the company in the new market which is fast growing. However, on researching the entering of new product, it is necessary to take into consideration not only the current trends in the industry or qualities of the product solely but also it is necessary to focus on the current socio-economic and political situation in the country since Oman is quite a specific country, especially if the company entering the product get used to operating in Western countries and does not really have sufficient experience of operating in the markets of developing countries of South West Asia.
Thus, it is necessary to thoroughly research the current situation in the Omani economy at large and in the pharmaceutical industry in particular in terms of this market plan as well as properly evaluate the perspectives of Rennie’s entering the local market as well as develop the efficient strategy of entering the market.
Macro environmental analysis
First of all, it is necessary to start with the macro environmental analysis in order to properly assess the present situation in the Omani economy and probably to better understand the general climate within the country in relation to foreign companies and the place of Oman in the world economy along with its basic economic characteristics. In fact, the analysis macro environment in such countries as Oman is of a paramount importance because this is a developing country which potentially may have problems typical for this category of states and which can make the entering of Rennie rather problematic or difficult.
Basically, developing countries are characterized by political as well as economic instability and low level of development. In the case of Oman, it should be pointed out that the political situation in the country remains relatively stable, though it is worthy of mention that, to a significant extent, this is the result of the fact that Oman is practically an absolute monarchy. To put it more precisely, the head of the country is the hereditary sultan who appoints the government to assist him. Only in recent years, there appeared an elected advisory council in Oman but its functions are quite limited and only the sultan is the absolute ruler of the country.
Obviously, such a situation contributes to certain stability within the country as long as there is no strong opposition to the ruling sultan. On the other hand, the absolute power of the sultan creates a number of problems a company entering the national market will have to deal with. For instance, the absolute power means that everything depends on the will of the sultan only and there are practically no democratic means to influence the situation in the market of Oman. Practically, it means that the stable and profitable work of foreign companies in Oman depends on the political will and interests of the local sultan.
At the same time, such a political situation affects dramatically the national economy since, being an absolute monarchy, Oman can hardly be classified as a country with an open market economy. Consequently, there is a risk that the free market competition within the country may face some constraints from the part of political powers of Oman and it is extremely important that the government, or to put it more precisely, the sultan does not interfere in the economic situation within the country. Otherwise, it will be quite difficult to enter the market with the new product such as Rennie if the domestic economic policy is unstable or changes very often. In such a way, it is possible to estimate that economic development and policy of Oman is highly dependent on the political situation and, what is more, on the will and intentions of one person only, i.e. the sultan of Oman.
Nonetheless, this is rather a potential risk that a really serious obstacle at the present moment. In actuality, Omani economy is dynamically progressing though, typically for developing countries, it is oriented on one industry only. As a result, the oil industry is the main, if not to say, the only industry that is really well developed in the country and which is the main source of income for Oman. In fact, this is the only industry that provides Oman with an opportunity to gain its place in the world market and, at the same time, provides the country with essential revenues from oil trade that contributes to the development of the national economy and sustaining of social stability within the country.
By the way, the latter is also a very important factor since it creates conditions for the normal economic development of the country and may be viewed as a guarantee for the security of foreign investments and good perspectives of foreign companies entering the market. This is why it is possible to estimate that social situation is quite positive for Rennie’s entering the market. However, it is worthy of noting that Oman is traditionally characterized as a ‘closed’ country, especially in a cultural sense that naturally can create certain problems with a foreign product, i.e. Rennie, entering the national market. Nonetheless, the recent changes and the involvement of the country in the world economy due to the oil trade made the local population more open and more confident in foreign investments and companies.
Finally, on analyzing the macro environment in Oman, it is necessary to briefly dwell upon the technological development of the country. In this respect, it is necessary to point out that basically the country is characterized by certain backwardness though the highly profitable oil export made the country richer that provided amply opportunities for a substantial technological progress. Nonetheless, the current situation in the country is not very optimistic for the local economy since Oman is still highly dependent on foreign technologies, including oil industry where the country is quite advanced. In brief, the country exploits natural resources, develops national economy and industries but, basically, uses foreign technologies and equipment while local ones remain hardly competitive. This is why it is possible to forecast that the entering of the new product, notably Rennie, will hardly face serious resistance from the part of the local companies if it is highly technological and sophisticated.
Micro environmental analysis
On discussing macro environment in Oman, it would be logical to dwell upon the micro environment. In general, it should be pointed out that at the present moment the pharmaceutical industry is rapidly growing in Oman. This is why the Rennie entering the Omani market is getting to be particularly important and the sooner the product will be introduced in the local market the better it is for the company. Otherwise, if the time is waste, the company will face a number of problems and obstacles while entering the product.
In such a situation, it is important to underline that the SWOT (Table 1) analysis reveals the fact that the company and its product, i.e. Rennie obviously have certain strengths in the entering the local market. First of all, it is necessary to point out that the product is internationally recognized that naturally contributes to the higher confidence of potential customers in the reliability and effectiveness of Rennie. Furthermore, the company has experience of entering the market of different countries, including developing one that obviously increases its chances on a successful introduction of Rennie in Oman. At the same time, the experience of the company also contributes to the flexibility of its policy depending on the specific characteristics of the local market. Also, the company is basically characterized by a very careful approach to the development of marketing strategies for every particular market the product is suppose to enter that makes it possible to presuppose that the strategy of entering the product will be quite efficient.
At the same time, it is equally important to underline the high professional level of people working in the company that makes the perspectives of Rennie in the Omani market rather positive than unclear or negative because high professionalism will naturally lead to positive results in the situation when the local pharmaceutical market is practically open for foreign companies and products.
In such a situation, there is no wonder that he opportunities for Rennie to gain a large share of the local market is extremely high, especially taking into consideration the rapid development of the pharmaceutical market of Oman. To put it more precisely, according to Oman pharmaceutical and health care report (2004), the Oman pharmaceutical market have demonstrated the stable growth within the last decade basically in the result of the positive economic and demographic trends. As a result, the annual growth over the last five years has approached 10% and specialists forecast that this trend will keep progressing in the nearest future (Oman Pharmaceuticals and Health Care Report 2004).
This is particularly important and provides really great perspectives for Rennie because the national market remains one of the smallest among GCC markets, with spending at an estimated US$84 million at retail prices. At the same time, it is worthy of mention that the positive forecast of the development of the pharmaceutical industry in Oman and, consequently, ample opportunities for Rennie to gain a large share of the local market, is based on the recent trends which indicate at the expansion of the health care sector and drug industry modernization. It is expected that by the end of this year the Omani market can reach almost US$ 110 million at retail prices.
On the other hand, such a rapid growth poses certain problems before the company and Rennie entering the market because, in such a situation, the company needs to enter the market in possibly shorter terms in order to avoid competition from the part of the local companies which, taking into consideration local political and economic peculiarities, such as lack of free open market principles, high dependence of economy on politics and political will of the sultan, etc., can create a serious opposition to Rennie as a foreign product to enter the national market and weaken national producers. At the same time, this threat could be minimized due to the technological advantages of the company over national producers.
However, the threat from the part of the foreign competitors is even more serious and real than from the part of national companies. In this respect, it is worthy of mention that the Omani pharmaceutical market is heavily reliant on import, accounting for over 95% of spending. Consequently, foreign companies dominate the market and Rennie will have to compete with products of such large and well-known companies as GlaxoSmithKline, Roche, Bristol-Myers Squibb, Sandoz, Merck and Co., Pfizer and AstraZeneka.
Obviously, the potential threats to Rennie in the Omani market are to a significant extent by the weakness of the company in this market. To put it more precisely, the market is really new for the company though it is not saturated yet this is why this weakness could be minimized if the company fast and effectively enters its product in the national market. Also, the high level of competition from other foreign companies operating in the market may be crucial if they have already developed good relations with the local political powers and have sufficient experience in the national market. However, the competition cannot fully prevent the entering of Rennie if efficient strategies are used and the product is well promoted. Furthermore, it is possible to enter the market of over-the-counter drugs since the foreign companies basically control the market of prescription drugs while the former market is rather open and free for expansion of Rennie. As a result, the new product will enter the market as a drug that is efficient, safe, and widely accessible for customers and no prescriptions is needed though the consultations with medical professionals are recommended. Potentially this can minimize another weakness of the company, the lack of confidence in local customers to the product and, in all probability, being persuaded in the safety of Rennie, they will readily buy it.
Nonetheless, to overcome all this difficulties it is necessary to develop an efficient market strategy using all the advantages of the product offered.
Naturally, the development of the marketing strategy is of a paramount importance for Rennie entering the Omani market since it permits to objectively set the market potential of the product, main objectives and the ways of their achievement. Taking into consideration the macro and micro environmental analysis mentioned above, it is necessary to describe the product which is supposed to enter the market, find its potential and define the ways of its promotion.
First of all, it should be pointed out that Rennie is a medicament that targets at the adult customers who suffer from such problems as heartburn, indigestion and trap wind. It is worthy of mention that practically all people can face such problems at some points of their life this is why potentially the target market of Rennie is the adult population of Oman which has the health problems mentioned above. It is necessary to emphasize that, basically, Rennie is an effective remedy that works fast and aims at the neutralization of the excess stomach acid. In fact, this drug is safe and, as a rule, it does not need any special prescriptions. Nonetheless, it is still recommendable to consult the doctor first before using Rennie or at least to carefully learn its effects, as well as possible side-effects which are actually few.
Basically, Rennie is recommended to use when people have the following symptoms: pain in the stomach, pain in the side underneath the ribs, burning chest pain, acid taste in the mouth, when people feel uncomfortably full after eating, bloating stomach, rumbling or gurgling noises in the stomach, bloated abdomen, flatulence, nausea or vomiting, general stomach discomfort. In such a way the range of symptoms when Rennie is quite large, but generally it is used in the case of heartburn, indigestion, and trap wind.
It should be pointed out that these problems are widely spread this is why it is possible to forecast that the number of potential customers may be quite substantial. At the same time, it is worthy of mention that these problems are often triggered by what people eat, and how they eat. The lifestyle of people is equally important since the problems like heartburn, indigestion and trap wind can result from the busy and stressful life. In this respect, it is important to underline that nowadays the life of Omani people is getting to be more and more stressful and the rapid development of the national economy increases the risk of job related stress. Moreover, the technological progress that has already reached the country due to its rapid integration in the world economy influenced the rhythm of life which has increased substantially in recent years.
Consequently, on summarizing the customer behavior in Oman it is possible to state that at the present moment Omani people have less time on the consumption of their traditional food and gradually, willingly or not, they will turn their gastronomic preferences to fast food which irrevocably deteriorates and aggravate digestion problems contributing to the increasing risk of getting such problems as heartburn, indigestion and trap wind. It is worthy of noting that in the future the situation will grow worse and naturally the demand on such products as Rennie will increase.
This is why in order to make the customers prefer Rennie to any other similar products of the pharmaceutical industry in Oman, it is necessary to promote the product effectively. In fact, the promotion is one of the key conditions of the commercial success of the product. At the beginning, it is possible to recommend developing a large advertising campaign that would involve practically all media widely accessible to average Omani people. Taking into consideration relatively low technological development of Oman, it is recommended to basically focus on such traditional media as television and press because such advanced and highly technological media as Internet, for instance, are hardly accessible for large masses of Omani population, though it does not necessarily mean that such media should be excluded from the advertising and promotional campaign. What is really meant here is that at the beginning the investments in advertising of Rennia via television and press are more preferable and should be significantly more substantial than spending on other media.
At the same time, the easy access of customers to this product is extremely important and there are several reasons. First of all, it is a purely economic reason since the market of prescription drugs is practically totally controlled by large foreign companies that already have a large experience of operating in the Omani market. As a result, the over-the-counter niche of the market seems to be more perspective for Rennie. In fact, it is even more logical because Rennie does not really need prescriptions and it is extremely important to inform customers about it as well as to emphasize the safety of this product. In this respect, it is possible to appeal to the large experience of the company in the pharmaceutical industry and to the fact that this product is recognized in many countries of the world and that many people are confident in reliability and efficiency of this product.
Obviously, such a promotional policy, should the confidence of local customers to the product and the company. However, the accessibility of the product, being based on the wide spread of information concerning Rennie, its effects and advantages compared to competitors, means that potential customers can buy at any place where drugs are sold in the whole country. This means that it is necessary to build up a wide network to sell Rennie throughout the country. Naturally, for the company that is entering the market, it is quite a difficult task. This is why it is possible to recommend cooperation with the local companies which are directly linked to sales of such products as Rennie.
Practically, it means that it is possible to cooperate with a large network or networks of supermarkets that are popular in the country and are represented even in its most remote parts. The same policy may be used in relation to the local pharmacies. Moreover, since the pharmaceutical industry is rapidly developing in Oman, it is even possible to recommend acquiring or merging with some of the local companies operating in the pharmaceutical market and having and well-developed network throughout the country. Also, it seems to be quite efficient to organize retail sails in the largest cities of the country so that the company could sell its product, at least on the retail scale, in all five governorates of Oman, being represented at least by one retail store in each governorate. Gradually, it will be possible to build up its own network but it is rather the future perspective that would be based on the existing needs while at the present moment there are no real need to invest in the development of a large network nationwide, at least on the first stages of the operation in the Omani market.
The latter is particularly important for the price of the product because the investment in the development of the company’s network in the country could be rather costly and this is why the price of Rennie could unreasonably increase, while it is extremely important to keep the price of the product at an average rate. In all probability, it will be not very difficult because local producers which could sell similar products at lower prices are too weak for they do not have either technologies or sufficient share in the local market to compete with foreign companies that control the pharmaceutical market of the country. On the other hand, the prices of foreign competitors could hardly be substantially lower than the prices on Rennie because they are produced, delivered and distributed in Oman in the similar way.
Thus, taking into account all above mentioned, it is possible to conclude that the perspectives of Rennie entering the Omani market seem to be quite good and there are several reasons for such an optimistic forecast.
On the one hand, the current macro economic environment, being not very good, still contributes to the growing international cooperation of Oman with other countries of the world. This is why foreign companies have access to the national market and their investments are quite safe. Moreover, the socio-economic and political situation in the country is stable enough to enter the market with a new product.
On the other hand, the micro environment is also assessed as positive for the pharmaceutical market in the country is progressing, local producers are quite weak while the potential of the local market is still not fully revealed. This is why even the perspective of the competitive struggle with other foreign companies does not put Rennie in a totally disadvantageous position since the market is not saturated.
At the same time, it is necessary to emphasize that the serious changes that are currently taking place in Omani culture, business and lifestyle can contribute to the dramatic increase of demand on such products as Rennie since the food culture of the country can be changed and the digestion problems the product is supposed to cope with can get to be widely spread.
Finally, it should be said that the cornerstone of the promotion of Rennie in the national market should be efficiency, safety and accessibility of the product and customers should be amply informed about it via mass media. As a result, it will be possible to gain and later increase substantially Rennie’s share in the national pharmaceutical market.
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